Sources close to Blackwater and its secretive owner Erik Prince claim that the embattled head of the world's most infamous mercenary firm is planning to move to the United Arab Emirates (UAE). The Middle Eastern nation, a major hub for the US war industry, has no extradition treaty with the United States. In April, five of Prince's top deputies were hit with a 15-count indictment by a federal Grand Jury on conspiracy, weapons and obstruction of justice charges. Among those indicted were Prince's longtime number two man, former Blackwater president Gary Jackson, former vice presidents William Matthews and Ana Bundy, and Prince's former legal counsel Andrew Howell.

The Blackwater/Erik Prince saga took yet another dramatic turn last week, when Prince abruptly announced that he was putting his company up for sale.

While Prince has not personally been charged with any crimes, federal investigators and several Congressional committees clearly have his company and inner circle in their sights. The Nation learned of Prince's alleged plans to move to the UAE from three separate sources. One Blackwater source told The Nation that Prince intends to sell his company quickly, saying the "sale is going to be a fast move within a couple of months."

Mark Corallo, a trusted Prince advisor and Blackwater spokesperson would neither confirm nor deny the allegation that Prince is planning to move to the United Arab Emirates. "I have a policy on not discussing my client’s personal lives – especially when that client is a private citizen," Corallo, who runs his own crisis management and PR firm, said in an email to The Nation. "It is nobody’s business where Mr. Prince (or anyone else) chooses to live. So I’m afraid I will not be able to confirm any rumors."

A source with knowledge of the federal criminal probe into Blackwater's activities told The Nation that none of Prince's indicted colleagues have flipped on Prince since being formally charged, but rumors abound in Blackwater and legal circles that Prince may one day find himself in legal trouble. Former Blackwater employees claim they have provided federal prosecutors with testimony about what they allege is Prince's involvement in illegal activity.

If Prince's rumored future move is linked to concerns over possible indictment, the United Arab Emirates would be an interesting choice for a new home--particularly because it does not have an extradition treaty with the US. "If Prince were not living in the US, it would be far more complicated for US prosecutors to commence an action against him," says Scott Horton, a Columbia University Law lecturer and international law expert who has long tracked Blackwater. "There is a long history of people thwarting prosecutors simply by living overseas." The UAE, Horton says, is "definitely a jurisdiction where Prince could count on it not being simple for the US to pursue him legally."

The UAE is made up of seven states, the most powerful among them being Dubai and Abu Dhabi. Since 9/11, they have emerged as hubs for the US war industry. "Global service providers" account for some three-quarters of Dubai's GDP, while oil represents only 3 percent. "They have established themselves as the premiere location in the Middle East for off-shore banking and professional services," says Horton, who has legal experience in the UAE. "If you have connections to the royal families, then the law doesn't really apply to you. I would be very surprised if Erik Prince does not have those kinds of connections there."

As a matter of policy the Justice Department will not discuss possible investigations of people who have not yet been charged with a crime.

Two former employees made serious allegations against Prince last August in sworn declarations filed as part of a civil lawsuit against Prince and Blackwater. One former employee alleged that Prince turned a profit by transporting "illegal" or "unlawful" weapons into Iraq on his private planes. A four-year employee of Blackwater, identified in his declaration as "John Doe #2," stated that "it appears that Mr. Prince and his employees murdered, or had murdered, one or more persons who have provided information, or who were planning to provide information, to the federal authorities about the ongoing criminal conduct." He also stated that "Mr. Prince feared, and continues to fear, that the federal authorities will detect and prosecute his various criminal deeds," adding: "On more than one occasion, Mr. Prince and his top managers gave orders to destroy emails and other documents. Many incriminating videotapes, documents and emails have been shredded and destroyed."

John Doe #2's identity was concealed in the sworn declaration because he "fear[s] violence against me in retaliation for submitting this Declaration." He also alleged, "On several occasions after my departure from Mr. Prince's employ, Mr. Prince's management has personally threatened me with death and violence." Doe #2 stated in his declaration that he provided the information contained in his statement "in grand jury proceedings convened by the United States Department of Justice."

Prince is also facing civil lawsuits brought by Iraqi victims of Blackwater. Among these is a suit filed in North Carolina by the family of nine-year-old Ali Kinani. Kinani's family alleges he was shot in the head and killed by Blackwater operatives in the infamous Nisour Square massacre in Baghdad in 2007. Earlier this year, Prince claimed he was spending $2 million a month in legal fees and on what he described as a “giant proctological exam” by nearly a dozen federal agencies.

Even if prosecutors believed they had enough evidence to charge Prince with a crime, because of the classified nature of some of Blackwater and Prince's work for the CIA and other agencies of the US government, prosecuting him could prove challenging. Prince has deep knowledge of covert US actions that the US government or military may not want public, which could be revealed as part of a potential defense Prince could offer. Blackwater--and Prince specifically--long worked on the CIA's assassination program.

Some observers believe that Prince has already engaged in "graymail" by revealing some details of his classified work for the CIA and military, specifically in a January 2010 article in Vanity Fair, written by a former CIA lawyer. Graymail is a legal tactic that has been used for years by intelligence operatives or assets who are facing prosecution or fear they soon will be. In short, these operatives or assets threaten to reveal details of sensitive or classified operations in order to ward off indictments or criminal charges, based on the belief that the government would not want these details revealed.

After Jackson and the other former Blackwater executives were indicted, their lawyers claimed that the US government approved of their conduct. "All of this was with the knowledge of, the request of, for the convenience of, an agency of the U.S. government," Jackson's lawyer Ken Bell told the judge during a bond hearing in April. Bell did not reveal which agency he was referring to and did not answer questions from reporters.

The latest developments in the Blackwater story come after a two-year campaign by Blackwater to rebrand itself as "Xe Services" and the "US Training Center." In March 2009, Prince announced he was stepping down as CEO of the company, though he has remained its sole owner. While Blackwater continues to be a significant player in US operations in Afghanistan under the Obama administration--working for the State Department, Defense Department and CIA--it is facing increased scrutiny on Capitol Hill and continued pressure from the Justice Department.

On June 11, federal prosecutors filed a massive brief in their appeal of last year's dismissal by a federal judge of manslaughter charges against the Blackwater operatives alleged to be the "shooters" at Nisour Square. In the brief, prosecutors asked that the indictment of the Blackwater men be reinstated. Meanwhile, two other Blackwater operatives were indicted in January on murder charges stemming from a shooting in Afghanistan in May 2008. Sen. Carl Levin, chair of the Senate Armed Services Committee has called on the Justice Department to investigate Blackwater's use of a shell company, Paravant, to win training contracts in Afghanistan.

Blackwater has been spending heavily this year on lobbyists--particularly Democratic ones. In the first quarter of 2010, the company spent more than $500,000 for the services of Stuart Eizenstat, a well-connected Democratic lobbyist who served in the Clinton and Carter Administrations. Eizenstat heads the international practice for the powerhouse law and lobbying firm Covington and Burling.

Prince sold Blackwater's aviation division earlier this year for $200 million. In announcing last week that the rest of Blackwater was up for sale, the company said in a statement that Blackwater's "new management team has made significant changes and improvements to the company over the last 15 months, which have enabled the company to better serve the US government and other customers, and will deliver additional value to a purchaser." While Blackwater has tried to shed the Blackwater name in many aspects of its business, the company has recently opened a series of Blackwater "Pro-Shop" retail stores, offering merchandise bearing the Blackwater name and original logo. Among the items for sale: pink Blackwater baby onesies, Blackwater pint glasses, Blackwater beach towels, and, of course, rifles.

In a speech in January, obtained by The Nation,Prince said that he intends to publish a book this fall. He was originally slated to come out with a book in June 2008 with the title "We Are Blackwater."

Jeremy Scahill, an independent journalist who reports frequently for the national radio and TV program Democracy Now!, has spent extensive time reporting from Iraq and Yugoslavia. He is currently a Puffin Writing Fellow at The Nation Institute. Scahill is the author of Blackwater: The Rise of the World's Most Powerful Mercenary Army. His writing and reporting is available at RebelReports.com.